The Australian Dollar strengthens as the RBA signals potential further tightening amid persistent inflation concerns.
AUD/USD climbed to 0.7090 during Monday’s Asian session, extending gains for a second day. The move follows the Reserve Bank of Australia’s hawkish stance, with Governor Michele Bullock emphasizing the bank’s willingness to tighten policy further if inflation remains elevated.
Analysts note the RBA’s recent communication leaves the door open for additional rate hikes. Societe Generale described the statement as hawkish, while Rabobank expects one more increase later this year, citing insufficient current policy settings. The US Dollar’s decline, driven by weaker-than-expected US retail sales data, also supported the pair.
US retail sales fell 0.6% month-over-month in July, missing consensus estimates of 0.1% growth. Annual sales rose 5.0%, down from 6.8% in June, reinforcing expectations of a softer Federal Reserve policy outlook.